Ireland ordered to amend legislation that
allows its oil stocks to be used as collateral

The European Commission today decided to send a
reasoned opinion to Ireland on the grounds that its national legislation does
not comply with the EU Directive on emergency oil stocks. Community law requires
Member States to hold a minimum level of oil stocks. It also requires the stocks
held to be fully at the disposal of Member States in the event of oil supply
difficulties. Irish law allows stocks to be used as collateral, which means that
they are not fully available to be mobilised as needed in an emergency, which
breaches Community law.

The Commission has found that Irish legislation from 2007 allows strategic
stocks to be pledged as security for loans granted to the holder of those
stocks. However, stocks held pursuant to the Directive may not be used as
collateral or encumbered by any charges whatsoever. A letter of formal notice on
this subject was therefore sent to the Irish authorities in May 2008.

The availability of oil stocks is a key element of the existing Community
legislation. The Commission sees it as vital for Member States to ensure that
stocks are available and accessible at all times and to make sure that the
stocks held are fully available to be mobilised as needed in an emergency.

Ireland will have two months to respond to the reasoned opinion. The
Commission will then decide whether the matter should be referred to the Court
of Justice.